In addition to consider what constitutes an emergency, the Tribunal in McArthur v The Owners – Strata Plan No. 30924 [2025] NSWCATCD 207 also provided an interesting discussion in relation to section 106 of the Strata Schemes Management Act 2015. Specifically, the Tribunal considered the standard of repair and whether mismatched tiles in a bathroom constituted damage. We discuss these below.
The Section 106 Strict Duty
The Tribunal reaffirmed the position stated in Selkirk v The Owners – Strata Plan No 2661 [2024] NSWCATAP 17 that section 106 imposes a strict duty on owners corporations to repair and maintain common property. Further, the Member reiterated that the obligation is not merely one to act reasonably. Rather, the duty continues until the common property is repaired.
That said, the decision also recognises that owners corporations retain some discretion in determining how repairs are carried out.
Patch Repairs v Full Rectification
The lot owner argued that the repairs did not comply with the Australian Standard AS 3740 concerning waterproofing and that the entire bathroom should therefore be demolished and reconstructed.
However, the Tribunal declined to make those orders.
The expert evidence before NCAT accepted that the works were effectively a “patch repair” and may not have fully complied with current Australian Standards. Nevertheless, the expert also concluded the repairs were functionally effective and fit for purpose in preventing further water ingress.
The Tribunal accepted that the owners corporation had, at minimum, achieved “minimal compliance” with its obligations under section 106 because the repairs had successfully stopped the leak.
The takeaway is that provided the owners corporation’s response adequately addresses the defect and satisfies its statutory obligations, NCAT may be reluctant to order broader or more expensive rectification works merely because they would be aesthetically preferable or technically superior.
Are Mismatched Tiles “Damage” under section 122(6)?
Another interesting finding concerned the issue of mismatched replacement tiles.
The owner argued that replacing old tiles with visibly different new tiles had diminished the presentation and value of the bathroom, but the Tribunal rejected that argument.
The Member held that aesthetic inconsistency alone did not constitute “damage” for the purposes of section 122(6). In the Tribunal’s view, “damage” in this context referred to actual physical harm or disfigurement to the lot or its contents.
While the Member accepted there was evidence of one cracked tile caused during the works, the claim still failed because no proper evidence was provided as to the cost of repairing or replacing that tile.
On this point, the Member cited Black J in Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31. The Tribunal was unwilling to “guesstimate” damages where more precise evidence could reasonably have been obtained.
The Importance of Proper Evidence
This leads to another theme that can be followed throughout the decision; the sufficiency of evidence.
The lot owner advanced claims relating to mould contamination, future waterproofing risks and diminished property value. However, many of those allegations were unsupported by expert evidence.
The Tribunal repeatedly noted that hearsay evidence from tenants was insufficient, quotations alone did not prove loss or damage; and technical conclusions regarding waterproofing failures required appropriately qualified evidence.
In the absence of credible expert evidence, the Tribunal was not prepared to make findings in the applicant’s favour.
Takeaways for owners corporations and strata managers:
- careful documentation of investigations, approvals and communications remains critical; and
- functional effectiveness may be more important than aesthetic presentation when assessing repair obligations.
Takeaways for lot owners:
- dissatisfaction with the appearance of repairs will not automatically justify compensation;
- expert evidence is essential when alleging defective waterproofing or consequential loss;
- claims for damages must be properly quantified; and
- NCAT is unlikely to order complete replacement works simply because an owner would prefer a more extensive solution.
The decision in McArthur reflects NCAT’s generally pragmatic approach to strata disputes in relation to emergency repairs.
Where an owners corporation responds promptly to an emergency repair request, relies on expert advice and carries out repairs that are functionally effective, the Tribunal may be reluctant to impose liability merely because the outcome is imperfect from an aesthetic or technical perspective.
For our first article on McArthur in relation to what constitutes and emergency: see here: What McArthur v SP 30924 Means for Owners Corporations – Part 1 Emergency Repairs in Strata
This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.
Author: Laura Skillicorn